Cookies Policy: We use cookies on our website to make sure we can give you the best experience while browsing. If you are happy with this, please continue to use this site as normal or learn more. Discard this message

Who are we?


The Future Isn’t Too Bright For Landlords

Published On


Stamp Duty Land Tax Changes

Higher rates of stamp duty land tax (SDLT) on purchases of additional residential properties are expected to be finalised for the Spring Budget (16 March 2016). This is therefore expected to impact upon Private Landlords, or those looking to buy investment properties in the near future.

The changes are as follows:

Property Price Current Rate Proposed Rate
Up to £125,000 0% 3%
£125,000 to £250,000 2% 5%
£250,000 to £925,000 5% 8%
£925,000 to £1,500,000 10% 13%
£1,500,000 or more 12% 15%


If you are therefore considering purchasing a second property, you should make yourself aware of the potential extra costs involved before proceeding. Alternatively, if you are in the process of buying a second property, you may wish to ensure it completes as soon as possible to avoid any unexpected costs.

No Tax Relief against Borrowings

The Finance Bill has revealed an unwelcome twist to the Budget changes.  The July 2015 Budget announced two changes to buy-to-let rules. The first was relatively straightforward:

A switch from a notional 10% wear-and-tear allowance for furnished lets to one based on actual expenditure incurred. The second was more complex: a four year phasing down of the tax relief on finance costs (primarily interest) to basic rate only by 2020/21.

Experts have highlighted that this move is not going to be as simple as it may initially look. The basic rate relief is to be given as a tax credit, not as a deduction against rental income which is how interest relief (and expense relief) currently operates. What it will mean is, from 2017/18 onwards buy-to-let owners will see their total income figure increase until, in 2020/21, the whole of their rental income (less other expenses), is added to their other income.

This could have some unfortunate consequences. For example, it might add enough to the individual’s overall income to mean they cross the £50,000 threshold at which Child Benefit is taxed. Or the £100,000 level at which the personal allowance starts to be phased out. Also, it might push up an individual’s marginal tax rate. The biggest effect, though will be for those buy-to-let investors who are most highly geared, and therefore (at present) have little or no taxable income from their property after deducting interest and expenses.

The obvious escape route is to adopt the approach used by most large buy-to-let property investors and use a corporate wrapper rather than own property personally. The new rules announced by the Chancellor do not apply to companies, but the corporate route has other drawbacks.

Many buy-to-let investors are unaware of just how much difference the change to interest relief will make.

For help and advice call Active today on 01642 765957 or email us at

To find out more about Active click here

< Back to Our Thoughts


01642 765957

If you would like to find out more about how we can help you, please give us a call or drop us an email.

Get In Touch

Latest News

  • 23046-2

    In just 4 weeks’ time (15th August),  I’m aiming to reconquer Mount Kilimanjaro in Tanzania – despite vowing never to return! Having suffered severe altitude sickness on a previous fundraising trek, I was inspired to tackle the 19,341ft African peak once again with just nine weeks’ notice. I signed up after being invited by client

Read More

Last Tweets


  • Having been a client of Active Finance for many many years and have always been given great advice and direction. I am now looked after by Andrew. He has given excellent advice and service, continuing on the great work this company has always offered me. Always cheerful and helpful; a great asset to Active. I

Read More

Active Financial Planners Ltd Registered in England & Wales No. 4039863 Registered Office: Active House, 1 Dukes Court, Thornaby, Stockton-On-Tees, TS17 9LR Active Chartered Financial Planners is a trading name of Active Financial Planners Ltd which is authorised and regulated by the Financial Conduct Authority